Enacy Mapakame-Business Reporter
ZIMBABWE’s retail and wholesale sectors are upbeat over the high economic growth prospects, which they believe will offset challenges already experienced during the first half of 2021 due to Covid-19 uncertainties.
During the first six months of the year, the economic environment was characterised by national lockdowns as the second wave of the pandemic hit the country hard in January.
While this was necessary to tame the pandemic, the lockdown measures negatively impacted business activities through supply chain disruptions and high costs of doing business against low revenues.
The lockdown measures also negatively impacted real disposable incomes mainly due to constrained economic activity, with retailers opening for limited trading hours, currently restricted to 8am to 3:30pm.
Within the retail and wholesale sectors, consumer discretionary firms such as Axia and clothing retailers — Edgars and Truworths lost over a month of business as physical stores closed in adherence to the lockdown rules regulations.
For instance, Edgars had its stores closed for more than seven weeks and resumed normal trading on March 03, 2021. Resultantly, revenue for the quarter to April went down 17 percent compared to the same period in the prior year.
While food and groceries stores have been classified as essential services and therefore allowed to operate during lockdown periods, the reduced trading hours and movement restrictions for customers weighed down on businesses.
Biggest retail chain — OK Zimbabwe indicated its profit for the year to March 31, 2021 halved to $1 billion as the country was plunged into various levels of national lockdowns resulting in reduced trading hours and demand.
The sector is hopeful of improved economic performance which will enhance consumer disposable incomes, as Treasury revised projections to 7,8 percent growth rate from the initial 7,4 percent announced in November last year.
The Confederation of Zimbabwe Retailers (CZR) is also pinning hopes on policy consistencies by Government to restore confidence in the economy, which will in the medium to long term benefit the sector.
“As the year progresses into H2, we are hopeful that the economy will benefit from the good harvest from the 2020/2021 agricultural season, declining inflation and continued rollout of the vaccination programme.
“It is also our hope that there will be consistency in Government’s policies as we are already in an uncertain environment marked by differing coronavirus variants and lockdowns occurring in different parts of the world,” said CZR.
Already, growth projections for the wholesale and retail trade sectors were slashed downwards from to 5,1 percent from 5,7 percent and the CZR notes more measures are required to support the sector in order for it to grow, contribute towards employment creation and lessen the pressure felt during the first half of the year.
Among other suggestions, the sectors are pushing for extension of trading hours from the current 8am to 3:30pm to 7am to 6pm.
“CZR is therefore kindly appealing for an extension of operating hours from the current 8am to 3:30pm to 7am to 5pm while curfew hours move from the current 6pm to 6am to 10pm to 5:30am,” CZR president Denford Mutashu said.
The CZR has also called on local manufacturers to be competitive in their production at a time an estimated 65 percent to 70 percent of shelf space is occupied by local goods.
In line with this, Government also need to ensure import substitution of raw materials to support local production and conserve the much needed foreign currency.
Said CZR: “We also note with concern how a significant number of local manufacturers are however still importing raw materials, thereby still requiring foreign currency. A case in point is that of disposable sanitary wear manufacturers which import over 70 percent of their raw materials.
“In light of this, we urge authorities to also take measures to ensure import substitution of raw materials, in line with the country’s local content policy.”